News Release

June 29, 2005

Gender, Education Key to Economic Health, Study Finds

People in some countries are finding a higher rate of return on their knowledge investments than others, says a University of Guelph economics professor. Gender and level of education are among the key factors affecting human capital and a nation’s economic well-being, according to a study by Thanasis Stengos.

“Investments in human capital benefit countries in different ways,” said Stengos who drew data from 51 nations for his research that will be published in a forthcoming edition of the Journal of Applied Econometrics. Stengos has already published findings from earlier studies related to this topic in the Journal of Applied Econometrics and the Journal of Economic Growth. “The developing world is benefiting from educating women, whereas the Western world is making more use of the human capital attained by males.”

In developing countries, the primary education of women is the most advantageous form of human capital, said Stengos. For example, educating women about family planning and alternative food production methods that aren’t as labour-intensive often decreases the number of children born, increasing per capita income. Keeping females enrolled in school, past the primary level, is another, he said.

However, with the rise of an information-based economy in developed nations, the leading human capital investment for national economic growth in countries like Canada is the post-secondary education of males. Stengos said women haven’t profited as much economically from their college and university educations. It’s an example of inefficient use of human capital resources, he said, and it doesn’t seem likely to change even though post-secondary enrolment is starting to favour women.

“Women aren’t seeing the economic advantages from post-secondary education that men are,” he said. Many women spent many years outside the labour force raising families and time away from work decreases women’s opportunities to capitalize on their university and college educations.

In many cases employers overlook women in favour of workers who don’t come with the added expense of maternity leave and the training and re-training it requires, Stengos said. “Employers often analyse the costs and benefits of a worker in their own thoughts during the hiring process. “Society just isn’t making as much use of their human capital.” This could change in time if affordable daycare policies allow women to re-enter the workforce faster, he added.

According to Stengos, by increasing education for males and females by one school-year, a nation can begin to forecast the future of its economy. Zimbabwe, Mexico, Malaysia and Ecuador are among nations seeing the least amount of return on educational investment while Ethiopia, Ireland, the United States and Japan rank among the highest. Canada is in the middle group of countries that includes the United Kingdom, Germany, France and Italy.